Midday Factoid: Market About to Hit 22x Forward P/E

Despite being more bullish than I've been for a year, I have too much respect for the market to emulate a fellow I saw at Santa Anita a few years ago. He was running to the mutual window with cash in each hand. Running from the window, that I can understand.
Here's a comment at MarketBeat on Monday (the post discusses declining 2009 earnings estimates for the S&P in 2009*):

$66.60 is still high but the more interesting question is what kind of multiple the market puts on the E.
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The S&P traded at 6.68 times trailing four quarters in April 1980 (eight months after the “Death of Equities” cover).
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There have been some structural changes in the market since then that might imply higher multiples but on the other hand investors may demand a higher Risk Premium and/or a higher dividend yield, both of which would call for a lower P/E.
10 X $45 trough earnings could be in the cards.
Funny thing though, A/O last Friday CI is leaning to the bull side.

Comment by Climateer - February 3, 2009 at 11:22 am

Zero Hedge gets it:

The S&P will likely hit 880 today. Based on a conservative 2009 S&P earnings projection of 40, this implies a 22x forward multiple, which is a realistic 80% premium to the past 130 years' historical average of 12x. If only the economy could now just jump right to 2017 when the depression is hopefully over and the mutiple has some sort of vaguely remote credibility.

Just saying.

*A Jan. 27 comment at MarketBeat when the analysts were looking for $71.00 S&P EPS:

S&P estimates of $71 might be a tad high.
I’ve seen a credible case made for $45 trough EPS for this year.
So what kind of multiple do we put on that?
Why oh why won’t GS let Abby Cohen out of her undisclosed location to tell us S&P 1600 by June ‘10?
Or a reprise of her Barron’s Roundtable 2008 DJIA, 14750?
Like the old joke says:
“Two Irishmen walk out of a bar,

Hey, it COULD happen.”

Comment by Climateer - January 27, 2009 at 1:56 pm